Do the Right Thing
Companies, no matter their size, need to have a strong culture of compliance. Accomplishing that means establishing, from the top of the business down, an environment that fosters ethical behavior, obeys the rules of law and uses common sense while making decisions.
The culture of compliance must be part of a company’s essence. It should be enforced to everyone related to the business that they should always do the right thing – regardless of the size of the decision or who’s in the room. A culture of compliance means that employees act the same whether or not lawyers, regulators, clients, supervisors or compliance officers are looking.
The reason for valuing compliance is simple. Every employee, partner, business owner, and third party alike all have an obligation to do what’s right for the good of their business, their community, their country, and the world. A culture of compliance helps serve that obligation, as long as it exists across the entire company and not just the compliance department.
From the other side, that means that it is important to the world (and the industry, community, and country) that compliance programs exist in companies of every type and size, not just global mega-corporations. Businesses of all types already have to comply with a diverse body of laws, regulations, and ethical standards. Creating a culture of compliance simply makes that easier. Did you know that having an effective compliance program may allow a company to mitigate punishment under criminal laws?
The Right Tone at the Top
A common phrase in the business world states that “a fish rots from the head down.” This isn’t practical advice for grocery store employees. It means that when a company fails, their leadership is the root cause.
Similarly, if a business wants to have a culture of compliance, they need to set the right tone at the top. It has been proven that the tone of leadership at a company is a major factor in determining the effectiveness of internal controls to prevent fraud; in treating customers, employees, business partners, third parties, and stakeholders fairly; and in contributing to the long-term success of the organization. If leadership is not committed to compliance, their company will not be committed to doing the right thing.
So how can leadership members help establish the culture of compliance? You can’t go wrong with this simple formula:
What You Get in Return
An organization that builds a culture of compliance has benefits that extend far beyond simply making it easier to avoid breaches of the law. One of the chief benefits will be an increase in your reputation. Good reputation will attract (and retain) top-tier talent, reliable business partners, and good clients. Your business reputation is invaluable, and it is obvious that a culture of compliance improves a company’s reputation.
How to Start Your Journey
Creating a culture of compliance does not mean hiring a compliance officer and patting yourself on the back. It must be embraced and implemented by the entire company, starting at the top. Once leadership has embraced compliance, their employees will as well. To create your own culture of compliance, contact Prae Venire today! We specialize in bringing compliance to companies of all sizes, no matter the industry.